Cameron, EU officials say time for curbs on tax evasion is now

LONDON (Reuters) - Britain’s Prime Minister David Cameron called on the European Union to use the impetus of the G8 summit he is hosting in June to organize “radical” international action to crack down on tax evasion and avoidance.

In a letter to Herman Van Rompuy, the President of the European Council, Cameron said it hoped the council would use a meeting of EU leaders on May 22 to push to increase cross-border tax reporting and transparency and improve tax collection in developing countries.

“There is now, ahead of the G8 Summit in June, a timely opportunity for the G8 and EU to inject the political will required to raise international efforts to a new level and take radical, rather than incremental, action,” Cameron wrote in the letter released on Thursday.

Van Rompuy said earlier this month that around one trillion euros was lost in EU member states each year because of tax avoidance and evasion.

Finance Minister Michael Noonan of Ireland, which holds the rotating presidency of the Council of the European Union, and European Commissioner for Taxation, Customs, Statistics, Audit and Anti-Fraud Algirdas Semeta also said policymakers should “build on the momentum”.

“Action to tackle tax fraud and evasion is demanded of us by our citizens,” they said in a letter to EU finance ministers dated Wednesday. The ministers meet next month.

The European economic crisis and massive budget deficits have raised public and governmental concerns about businesses and rich individuals using tax havens to escape paying tax.

Cameron has placed the issue at the heart of the agenda for the summit of the world’s richest nations in Northern Ireland on June 17-18.

In recent months, Britain has put pressure on big multinationals over how much tax they pay after a parliamentary committee last year accused Google, Amazon.com Inc and Starbucks Corp of “immorally” minimising their tax bills.

“We must break through the walls of corporate secrecy,” Cameron said in his letter.

“A lack of knowledge about who ultimately controls, owns and profits from companies leads to aggressive tax avoidance, tax evasion and money laundering, undermining tax bases and fuelling corruption across the world.”

Reporting by William James and Tom Bergin; Editing by Sonya Hepinstall